Michele Suriano, President of Castle Rock, recently participated in a panel at the PLANSPONSOR National Conference in Chicago, “Metric Taking: Going beyond the participation rate when gauging retirement plan success.” The panel encompassed the following topics:
- Leading Indicators: Suriano uses the following leading indicators: median deferral rate broken down by HCE and NHCEs, percent using auto-escalate, percent using catch-up, percent maximizing company match, percent of assets in auto-diversified options and percent using auto-rebalancing.
- Benchmarking: Suriano uses the Plan Design Optimization Report from Fiduciary Benchmarks, Inc. to benchmark retirement readiness. She also recommends creating a median-participant “avatar” to measure plan success, which is a composite representative of a particular plan, taking into account the median age, salary, deferral rate and account balance of that specific population. Suriano then compares the avatar against the National Savings Rate Guidelines for Individuals.
- Fees: Suriano stressed that fees have become a huge issue, although they have very little impact on participant outcome, compared to deferral rate. She recommends using the 401K Averages Book to evaluate plan fees. She has done conducted RFIs with price requests for her clients as an educational tool, which may reveal advancements in the marketplace that aren’t being provided by the current provider. She stressed the importance of researching fees because, “What gets measured gets improved.”
- Goals and Objectves: Suriano determines her clients’ goals and objectives upfront and includes it on the first page of their quarterly report. She recommends writing down the plan’s goals and objectives since there is turnover on committees.
For more information, please contact Castle Rock Investment Company at 303-725-7086.